The company, which also owns KFC and Taco Bell, posted profits after the market closed Tuesday that were 8 cents behind what analysts had estimated.

The company’s stock was down 8 percent in after-hours trading.

The sales drop was brought on in part by news reports that KFC chicken had high levels of antibiotics.

Yum has consistently said it can pull out of the slump in China. Tuesday it conceded that problems there are impacting profits.

“Given a slower-than-expected sales recovery at KFC China and a higher-than-expected tax rate, we are now estimating a high-single to low-double-digit percentage decline in full-year EPS versus prior year, excluding Special Items,” David C. Novak, chairman and chief executive said in a statement.

Louisville,KY (Oct. 8, 2013) – Yum! Brands, Inc. (NYSE: YUM) today reported results for the third quarter ended Sept. 7, 2013, including EPS of $0.85, excluding Special Items. Reported profit per share was 33 cents for the quarter that ended Sept. 7. That includes a 55 cents a share non-cash charge related to the write-down of intangible assets related to its Little Sheep chain.

Worldwide system sales grew 1 percent, prior to foreign currency translation, including 5 percent growth at Yum! Restaurants International (YRI). System sales declined 2 percent in China and were flat in the U.S.

Same-store sales declined 11 percent in China. Same-store sales grew 1 percent at YRI and were flat in the U.S.

Total international development was 364 new restaurants; 79 percent of this development occurred in emerging markets.

Worldwide restaurant margin declined 1.3 percentage points to 17.6 percent, including declines of 1.9 percentage points in China, 0.6 percentage points at YRI and 0.7 percentage points in the U.S.

Taco Bell, a corporate cousin of Plano-based Pizza Hut, sold more tacos made with Doritos shells last year than there are people in the U.S.

The launch of Doritos Locos tacos, a collaboration between Taco Bell and Plano-based Frito-Lay, provided one of the few bright points for Louisville-based Yum Brands Tuesday as executives were peppered with questions from analysts about a massive sales drop in China.

Yum Chief Executive David Novak said the company needs the “gift of time” to help Chinese consumers get past extensive media coverage that linked KFC chicken suppliers in China to elevated levels of antibiotics.

China’s Food and Drug Administration has made a number of recommendations for improved quality assurance which the company “wholeheartedly accepts,” Novak said.

With China accounting for 42 percent of Yum’s profit last year, the company already is predicting a profit per share drop in the mid-single digits for 2013.

But Novak spoke of the “historical resilience of the brand” adding “we expect to weather this storm and come out stronger.”

In the U.S., which for years has been overshadowed by the growth in China, executives pointed to the sale of 325 million Doritos Locos tacos since the product launched last year.

A new flavor, with a Cool Ranch Doritos shell, is expected to launch in March.

The Yum restaurants were formerly part of PepsiCo, parent of Frito-Lay.

Yum also said Pizza Hut in the U.S.is continuing to grow, after years of declining restaurant counts.

Pizza Hut added 150 net new locations last year, the second consecutive year of net growth following a decade of decline, the company said.

Pizza Hut and Taco Bell restaurants in the U.S. posted strong sales gains in the first quarter as the parent company, Louisville-based Yum Brands Inc., reported U.S. operating profit that jumped 27 percent.

Yum earned $458 million, or 96 cents a share, for the quarter that ended March 24, up from $264 million, or 54 cents a share, a year ago. Excluding one-time items and special events, the company earned 76 cents a share, three cents ahead of analysts’ estimates.

Revenue was $2.74 billion, up 13 percent.
The company also boosted its 2012 full-year profit growth guidance to 12 percent.
In the U.S., which had been one of the weaker divisions, same-store sales increased 5 percent. That includes growth of 6 percent at Taco Bell, 5 percent at Plano-based Pizza Hut and 2 percent at KFC. U.S. operating profit was $158 million.

Yum Brands Inc., parent of Plano-based Pizza Hut, didn’t disappoint when it reported earnings after the market closed today.
For the quarter that ended Dec. 31, Yum Brands earned $356 million, or 75 cents a share, ahead of analysts’ estimates by one cent. Profits were up 30 percent from the $274 million, or 56 cents a share, posted a year ago.
Fueled largely by red-hot growth in China and some European markets, revenue gained 15 percent to $4.1 billion, besting the predicted $4.03 billion.
Yum’s stock has been on a steady climb since 2009, rising from $27.57 a share in February of that year to $63.80 a share early Monday, for a gain of 131 percent. The stock closed down Monday at $63.19, but was up 2 percent in after-hours trading.
Yum also owns Taco Bell and KFC.

Yum Brands Inc., parent of Plano-based Pizza Hut, reports earnings after market close today and analysts are expecting a whopping 17.5 percent jump in profits, compared with a year ago.
Fueled largely by red-hot growth in China and some European markets, Yum is expected to post earnings of 74 cents a share, up from 63 cents a year ago.
Revenue is projected to be $4.03 billion, up 13.1 percent from the year-ago posting of $3.56 billion, according to Forbes. For the year, revenue is projected to come in at $12.54 billion.
Yum’s stock has been on a steady climb since 2009, rising from $27.57 in February of that year to $63.80 early Monday, for a gain of 131 percent.
Yum also owns Taco Bell and KFC.